Court name
Labour Court
Case name
Minister of Trade and Industry v Harakuta
Media neutral citation
[2005] NALC 2










CASE
NO.: LCA 17/2004








SPECIAL
INTEREST


SUMMARY








MINISTER
OF TRADE AND INDUSTRY
versus
GLORIA HARAKUTA









DAMASEB, P









13/07/2005






RULE 22 OF THE RULES
OF THE DISTRICT LABOUR COURT: RESCISSION OF JUDGMENT









- Appeal against refusal of
application for rescission of judgment.






- Legal practitioner of applicant for
rescission of judgment incompetently and negligently conducting
matter; effect thereof on application for rescission.







- Strength of applicant’s defence
to claim considered a critical factor.









CASE
NO.: LCA 17/2004








IN
THE LABOUR COURT OF NAMIBIA








In
the matter between:











MINISTER
OF TRADE AND INDUSTRY APPELLANT








and








GLORIA
HARAKUTA RESPONDENT











CORAM:
DAMASEB, PRESIDENT








Heard
on: 2004.10.04





Delivered
on: 2005.07.13









JUDGMENT


DAMASEB,
P
:
This is an appeal against an order of the District
Labour Court, Windhoek (DLC), per Mr. Britz, dismissing an
application for rescission of judgment granted by default (per Mrs
Nathaniel) in terms of Rule10(4) of the Rules of the DLC.





On
the 23rd of October 2003, when Mrs. Nathaniel was called
upon to consider the application for default judgment, Mr Rukoro (a
labour consultant representing the respondent in the court a quo),
made the following submission:














My
submission is that the Respondent failed to adhere to Rule 6
conference and failed to attend court today … I therefore apply
for a default judgment in terms of Rule 10(4).”





The
Court (Mrs Nathaniel) then said:






I
perused through the file, and I can see that the Respondent was
served with notices to both attend a Rule 6 conference on 28th
August 2002 and today’s Court hearing. There is a reply filed
with the clerk of the Court
, which in effect means that the
respondent is aware of today’s hearing. The respondent is absent
from Court with no reason given or explanation. Rule 10(4) is clear
and this Court believes that the respondent is aware of it. The
complainants’ application for default judgment is granted.” [my
emphasis]





These
proceedings took place on 23rd October 2002.





Rule
10(4) provides as follows:






If
a Respondent who has been duly served with a copy of the complaint
and a notice of the hearing as provided for in rule 5(2), fails to
reply to the complaint within the time provided in rule 7 or fails
to appear at the hearing
, the chairperson may, if in his or her
opinion the facts relating to the complaint are sufficiently
established, determine the complaint and make such an order as is
authorized by the Act, notwithstanding the respondent’s failure to
reply or to appear, as the case may be.”





The
appellant then applied for rescission of the judgment granted by
default. Rescission of judgment is governed by Rule 22 of the Rules
of the DLC. The following grounds were relied upon in the
application for rescission of judgment:






  1. The
    legal representatives of the appellant were not served with a notice
    of the Rule 6 conference; were not aware that the matter was set
    down for hearing or that the Rule 6 conference was scheduled
    earlier;








  1. The
    failure to attend the hearing on 23rd October 2002 was
    not willful as the legal representative was not aware of it.







  1. The
    dismissal of the respondent (Complainant in the Court a quo)
    was substantively and procedurally fair as she had occasioned a loss
    of more than N$60 000-00 to the appellant. In the application, the
    history of the matter is set out of how the respondent , in an
    unauthorized way and using a fax-line of the appellant , made
    private calls which amounted to in excess of N$60 000-00. The
    disciplinary hearing that was conducted is also referred to; the
    fact that she was, after being found guilty as well as the fact that
    she was , afforded a period of 30 days within which to settle the
    debt or face dismissal; and that she never paid the debt within
    such period and was thus dismissed.






The
respondent in her answering affidavit to the application for
rescission of judgment does not deny that she used the fax-line of
her employer to make long-distance calls in the amount claimed. She
claims though that such calls were





allowed
as long as she paid to government the value of the calls. She says
that she offered to pay the outstanding debt in installments of
N$200-00 per month and that the offer was accepted and that she
performed in terms thereof and that for that reason, her dismissal
was unfair. She does not deny that she faced misconduct charges and
was found guilty following such a hearing. In regard thereto she
says in her answer in reference to paragraph 10 of the founding
affidavit
1,
that:






While
this paragraph is admitted
I respectfully submit that the
disciplinary hearing erred in both fact and law when it made the
unreasonable recommendation that I should pay the said amount
within 30 days. The said hearing further committed an error when it
found that should I be unable to pay I should be dismissed, while
they did know as they knew what my salary per month was that I would
not be able to pay.
Suffice it to say, the Applicant/Respondent
had no problem with the fact that I had used its facilities in the
way that I did but only had a problem with the fact that I could not
repay the money over a shorter period of time. I respectfully submit
this constitutes no valid and fair reason for my dismissal.” (my
emphasis)





The
respondent, needless to say, disputes that the appellant was not in
willful default.








The
respondent seems to rely on two documents for the allegation that she
had the permission to make private calls as long as she paid for
them. I propose to quote these two documents in full:





The
first one reads thus:


“MINISTRY
OF TRADE & INDUSTRY





INTERNAL
MEMORANDUM





TO: ALL
MTI STAFF





FROM: MR
A P NDISHISHI


PERMANENT
SECRETARY





DATE: 18
MAY 2001





SUBJECT: COST
CUTTING MEASURES





I
would like to bring to your attention measures that might help us in
our exercise to reduce our expenditures.





1. TELEPHONE
CALLS







    1. All
      staff-member’s telephones should only be open for local calls
      except the ones for Directors and Deputy Directors.










    1. For
      a staff member to call outside Windhoek a written approval from the
      Director of the relevant Directorate should be submitted to the
      switch-board operator, where the number to be called and the
      reasons are to be indicated.









    1. Telephone
      computer printouts must be verified by the Directors in the
      presence of the staff member concerned and returned to the accounts
      section without delay.









    1. Private
      calls shall be paid for in full at the end of the month following
      usage.”







The
second one reads thus:


INTERNAL
MEMORANDUM






TO: All
Officials







FROM: Mr
M G Kuyonisa



Acting
Permanent Secretary







DATE: 7
August 2001







RE: TELEPHONE
USE







  1. This
    memo serves to inform all officials to apply for approval when
    making international/national calls.
















  1. Attached
    find a form that needs to be completed whenever an
    international/national call is due to be made as well as information
    on how to operate a telephone.







  1. The
    register which all telephone users must keep should be in place and
    must also be updated.







  1. A
    four-digit code will be allocated to all telephone users, which will
    enable only the user to make a call from his or her telephone.







  1. This
    code will also register the users name whenever a call is made
    whether its from your telephone or any other telephone.







  1. In
    future regular spot checks will be made in order to make certain
    whether these records are kept.







  1. Your
    usual co-operation is highly appreciated.”






Mr
Britz handed down written reasons dismissing the application for
rescission of judgment. The first point the learned chairperson
raises in his written judgment is that the appellant failed to comply
with Rule 7(3)
2,
even up to the stage that the rescission of judgment application was
heard. As I have shown by reference to Mr Rukoro’s submission in
court on 23rd October 2002, and the





remarks
of Mrs Nathaniel, the reason why default judgment was granted was on
account of the failure of the respondent to be present at the
hearing. Failure to file a proper reply was never an issue. It was
therefore improper for Mr Britz to have raised the issue at the stage
of the rescission of judgment proceedings. Appellant was entitled to
assume that judgment was granted for the reason asked for by the
respondent, and stated by Mrs Nathaniel as the basis on which she
granted judgment by default. It must be the reason that the
appellant never dealt with the Rule 7(3) failure in the application
for rescission. Mr Britz’s reliance thereon in his judgment and to
refuse rescission on that basis , is therefore improper and amounts
to a misdirection. I do not think that the fact that the issue was
raised in the answering papers by the respondent (i.e. that she was
never served with the reply) changes the picture. In any event, Mr
Dicks, for the appellant, in argument, raises the point that the
attempt by the appellant to serve the reply properly was frustrated
by the fact that the respondent failed, as required by the Rules of
the DLC , to provide her physical address. There is merit in this
argument. I need not deal any further with this point.





Another
point taken up by Mr Britz in his judgment is what he refers to as
the failure by the appellant to comply with Rule 20 of the Rules of
the District Labour Court “as there is no proof that the
notice of motion, filed with the clerk of the District Labour Court
on 13th November 2002, as well as the notice of amendment
to the notice of motion filed on 3rd December 2002, were
delivered according to the definition of “delivery” or deliver in
Rule 1”.








This
issue was never raised in the respondent’s answering affidavit.
Besides, the respondent opposed the application for rescission and
filed opposing papers. She therefore had notice of the proceedings.
In the light of the issue not having been raised by the respondent
in her answering papers, it was improper, and thus a misdirection,
for Mr. Britz to rely on the point in the way he did and to found the
basis for refusing the rescission application.





As
regards the failure of the appellant to attend the Rule 6 conference,
Mr Britz seemed satisfied that the respondent only got to know on
27th August 2002 that the conference will be held on 28th
August 2002; i.e. one day before it was held. Mr Britz also seemed
to entertain doubt that the legal representative of the respondent
was aware of the date of the Rule 6 conference. He said:






This
time Mr Asino didn’t slip up again but now the Applicant/Respondent
failed themselves when they didn’t bring the date of the Rule 6
hearing under the attention of Mr Asino. If they did bring it under
the attention of Mr Asino then Mr Asino could inform the labour
inspector that he received too short notice and that he would like a
postponement of the Rule 6 conference. The Applicant/Respondent
could ask for a postponement of the Rule 6 conference without
assistance from Mr Asino. It is common practice that a postponement
of the Rule 6 conference is granted if one party received too short
notice of it.”





The
learned chairperson Mr Britz was thus satisfied that the respondent
gave too short a notice of the rule 6 conference to the appellant but
still held it against the appellant that they did not do anything
about it.





In
order to succeed with the application for rescission of judgment, the
appellant, as Mr Britz rightly said, had to:







  1. give
    a reasonable explanation for its default;


  2. show
    that the application was bona fide; and


  3. show
    that it has a bona fide defence to the claim of the
    complainant.






(See
Xoagub v Shipena 1993 NR 215 at 217 D-G; Rothe v Asmus &
Another
1996 NR 406 at 410 A-J; and City Council of Windhoek
v Peterse
2000 NR 196 at 198 A-D.)





The
learned chairperson, Mr Britz, was satisfied that there was willful
default. I agree with him in part only; and that is in so far as his
comments relate to the conduct of the legal representative of the
appellant.




Having
considered all the circumstances in this matter (which it is
unnecessary to repeat in this judgment), I must agree with Mr Dick’s
submission, for the appellant, that the respondent at all times
wished to defend the complaint lodged against it by the respondent.
I am also satisfied that default judgment was obtained against the
respondent because of the incompetence and negligence of


its
legal representative. The record is replete with examples of the
incompetence and negligence of respondent’s legal representative
from the office of the Government Attorney.








In
his judgment Mr Britz said the following:






The
facts and circumstances in this case is different from those in R v
Chetty 1943 AD 321 although the excuses offered by the attorney
concerned are in both



cases
unsatisfactory, the Applicant/Respondent in this particular case
is also responsible for failure to attend the Rule 6 conference and
appearing at court on 23rd October 2002 as well as failure
to secure presence of its representative or informing the
representative about the date of the hearing.





The
evidence shows that on 27th August 2002 the secretary of
the Permanent Secretary of the appellant had knowledge that the rule
6 conference was to be held on 28th August 2002. The
evidence does not show if she (as a lay-person) appreciated the
import of such a conference nor that she brought it to the attention
of her superior, the Permanent Secretary. In any event, respondent,
through the secretary, had only one day’s notice of the rule 6
conference. I think not too much ought to be made of the failure to
attend the rule 6 conference in the way the learned chairperson Britz
had done.





The
above quotation from Mr Britz’s judgment conveys the impression
that he places the blame for non-appearance on 23rd
October 2002 squarely on the doorstep of the respondent. If, as the
Court had done, it was accepted that the respondent’s legal
representative was aware of the date of the hearing
3
but did





not
show up, the fact that the officials of the appellant did not show up
at Court, pales into insignificance. They were legally represented
and were entitled to be advised what to do about the hearing. The
fact that the legal representative of appellant was not present at
the hearing points to the conclusion, in my view, that he did not sit
down with the clients to consult for the hearing. Is it surprising
in those circumstances that they did not show up at the hearing? The
blame is to be placed squarely at the doorstep of the legal
representative whose duty, as officer of the Court, is to prepare for
the hearing including pre-cognizing witnesses and requiring their
presence at the hearing.





In
my view, therefore, and in view of the incompetent and negligent
conduct of the case by the legal representative of the respondent,
this case will turn on whether or not the appellant must be held
responsible for the remissness of its


legal
representative. That inquiry, however, I only intend to deal with if
I am satisfied that the appellant is bona fide in its
application and has a bona fide defence to the Complaint. If
I am satisfied that there is no bona fide defence, the appeal
must fail; even without the need for considering whether or not the
remissness of its legal representative must be held against it. Mr
Britz found there was no bona fide defence to the complaint.
Was he right?





The
Complaint in casu is one of unfair dismissal on the basis that
the dismissal was “procedurally and substantively unfair.”











The
appellant’s case (vide the Reply) is that the complainant admitted
guilt to a charge of misconduct involving the use of the appellant’s
fax machine “during


official
working hours, after hours and over week-ends to make unauthorized
private long distance calls which amounted to N$61 803-71.”

Appellant’s case further is that the complainant pleaded guilty and
was discharged from the


Public
Service after she failed to take advantage of the offer to repay the
outstanding debt within 30 days.





As
I pointed out earlier, the respondent seems to rely on the two
documents dated 8th May 2001 and 7th August
2001 for the proposition that she was allowed to make private calls
as long as she paid for them. The conduct she is accused of, it
appears, happened prior to these two circulars. She however relies
on them and therefore I will accept, as did Mr Britz, that their
contents were in effect when she made the phone calls - which, it
is common cause, were largely calls to Brazil; made, not from the
ordinary phone, but from the employer’s fax-line.





The
document of 18th May 2001, in para 1.4 says:





“Private
calls shall be paid for in full at the end of the month following
usage.”





I
do not think that the document of 7th August 2001 is in
any way supportive of the case of the respondent. I think it goes
against her. I will however disregard it for the purposes of this
judgment and will only assume that at the time she made








the
calls the policy of her employer was that ‘ private calls are
allowed as long as the employee pays them at the end of the month
following.’





The
respondent suggested, and this persuaded Mr Britz, that the fact of
her inability to pay the outstanding debt in full, as was required by
the appellant after the respondent was found guilty by the
Disciplinary Hearing, showed that


her
dismissal was unfair because of the unreasonableness of such an
ultimatum in view of the fact that the respondent was aware that she
only earned N$900 after deductions. Not only is this assertion at
odds with the one that the appellant accepted her offer to pay N$200
per month , but the reasoning loses sight of the fact that the
respondent’s case is that private calls are allowed as long as one
pays for them at the end of the following month. The admission that
she was unable to pay the outstanding amount in full, in my view, is
irreconcilable with the assertion that she was allowed to make the
calls she did: How could the employer have authorized calls which
they know the respondent would not be able to pay in terms of the
Policy Directive? Besides, the Treasury Instructions promulgated on
the authority of s 24 (1) of the State Finance Act, 31 of 1991 state
as follows:






An
employee of the State is allowed to use an official telephone for
urgent private calls within reasonable limits. The costs of private
local calls are not recovered from such a person provided that he
does not abuse the privilege.














The
cost of all private phonograms and trunk calls, including trunk calls
that can be dialed directly, shall be recovered.






All
possible steps shall be taken to prevent the misuse of official
telephones. In addition to efficient supervision, a ministry shall
keep a central register for all official telephones.”





Under
the heading, “Recovery of debt to the State, the Treasury
instructions state:






(1) Unless
otherwise prescribed, debts owing to the State (except where the
conditions of payment are determined by law, agreement, etc.) may, at
the



discretion
of accounting officers and without reference to the Treasury be
recovered by means of installments, provided that –






  1. due
    cognizance be taken of the debtor’s standing and financial
    position in determining the period of repayment; and








  1. the
    debt is recovered within a period of 12 months
    .






(2) a) In
terms of section 11(4)(b) of the Act debts shall only be handed over



to
the State Attorney for collection if the accounting officer carried
into effect the provisions of section 11(1) of the Act and could not
succeed in collection the debt.













b) The
State Attorney may in consultation with the accounting officer at



his
discretion and without reference to the Treasury recover debts to the
State by means of installments, including installments for a period
longer than 12 months.







  1. All
    cases where the debtor’s legal representative made an offer shall
    always first be referred to the State Attorney before the offer for




installments,
irrespective of the period connected therewith, is accepted.”

[my emphasis]





The
respondent’s case is that she entered into an agreement to pay the
outstanding amount in monthly installments of N$200-00 per month.
Even without going into the inherent probabilities of that version,
the Treasury


Instructions
require that debts must be recovered within a period of 12 months.
If the respondent is to pay the amount due in installments of
N$200-00, it would take more than 25 years (excluding interest) to
pay back the debt. The version of the respondent that it was agreed
that she would pay the debt in installments of N$200-00 is therefore
implausible. The appellant, in my view, had satisfied the test of a
bona fide
defence.
I make bold to say that the Complaint in this case comes perilously
close to being vexatious.





As
I said earlier, the appellant had throughout evinced the wish to
defend the complaint but was let down by its legal representative. I
cannot see therefore on what basis it can credibly be argued that the
application for rescission is not bona fide; especially
because what is involved is the misuse of public funds.





I
am satisfied, therefore, that the appellant showed that it is bona
fide
and has a bona fide defence to the respondent’s
claim. The only issue now for me to consider is whether the
application should have failed in any event because of the
demonstrable remissness of the legal representative of the appellant.





I
already remarked that there is ample evidence of remissness and
incompetence on the part of the appellant’s legal representative in
the handling of the whole matter. I reject the learned chairperson
Britz’s view that the respondent itself was remiss in their
handling of the matter. Even if it was, I do not think it was of
such nature to have them penalized in the way they were.





Now,
should the appellant escape because the remissness is attributable to
its legal representative?





Learned
chairperson Britz referred to the matter of Solojee and Another v
Minister of Community Development
1965 (2) SA AD at 141 B-E for
the proposition that a litigant will in certain circumstance be
penalized for the remissness of its legal representative. That
restatement of the law followed in the wake of the decision of the
same Court, in Regal v African Superslate (Pty) Ltd 1962 (3)
SA 18 (A) at 23, also making plain that depending on the
circumstances of a case, the remissness of the attorney will not be
visited upon the litigant.





At
the end of the day, each case is to be approached on its own facts.








It
has been said by Jones J in De Witts Auto Body Repairs (Pty) Ltd v
Fedgen Insurance Co Ltd
1994 (4) SA 705 (at 771 E-F) as follows:






An
application for rescission is never simply an enquiry whether or not
to penalize a party for his failure to follow the rules and
procedures laid down for civil proceedings in our courts. The
question is, rather, whether or not the explanation



for
the default and any accompanying conduct by the defaulter, be it
willful, or negligent or otherwise, gives rise to the probable
inference that there is no bona fide defence, and hence that the
application for rescission is not bona fide. The magistrate’s
discretion to rescind the judgment of this court is therefore
primarily designed to enable him to do justice between the parties.
He should exercise that discretion by balancing the interests of the
parties….”





(See
also Buckle v Kotze 2000 (1) SA 453 at 458 D-I.)





In
casu
the record shows clearly that upon receipt of the Complaint
the appellant instructed the government attorney to represent it in
opposing the Complaint. The Reply was filed with the Court on time;
meaning instructions were given about what the appellant’s defence
in the matter was. On the day of the hearing, the appellant (however
they came to be aware of it) contacted the office of the Clerk of the
District Labour Court and asked that the matter be stood down until
in the afternoon. That they always intended to oppose the matter can
therefore not be in doubt. Their legal practitioner failed them
though.











I
am unable, on the facts of this case, to say that the appellant was
willful in the sense that “import the notion of a deliberate act
by the perpetrator who knows what he is doing, intends what he is
doing, and is willing that the consequences of his default should
follow.”
(See Micor Shipping (Pty) Ltd v Treger Golf &
Sports (Pty Ltd
1977 (2) SA 709 (W) at 713 D.)





Abuse
of public property and misappropriation of public funds by government
officials are on the ascendancy. It is important that the Court not
send a wrong signal that such conduct will be condoned. The amount
involved in this matter is so high when compared to the income of the
respondent. There is no realistic chance of her ever being able to
repay it. In view of her conduct leading to the misconduct charges
against her, the complaint, as I already said, comes perilously close
to being vexations. The appellant has a strong defence against the
claim of the respondent, and has also evinced the desire to defend
the matter.


It
is settled law that the fact that the applicant for rescission has a
strong defence to the claim, and the importance of the case may, in
an appropriate case, compensate for any weakness there may be in his
case establishing absence of willful default. The present is such a
case.





I
am satisfied that this is a proper case, despite the remissness of
the legal representative of the appellant, to exercise the Court’s
discretion to rescind a judgment granted by default. I must make it
very clear to the government lawyers that the conclusion that I came
to here was justified by the peculiar facts of this case and that the
result in this case must not be taken to mean that rescission of





judgment
will be granted as long as a government agency is able to show that
there was gross negligence or incompetence in the office of the
government attorney.





In
the premises:






  1. The
    appeal succeeds.








  1. The
    order of Chairperson Britz refusing the application for rescission
    of judgment is set aside.







  1. The
    appellant’s application for rescission of judgment granted by
    default on 23rd October 2002 by Chairperson Mrs
    Nathaniel, is allowed.





















____________________


DAMASEB,
P



































ON BEHALF OF THE
APPLELLANT Mr G Dicks







Instructed
by: Government-Attorney



















ON BEHALF OF THE
RESPONDENT Mr T N Mbaeva






Instructed by: Mbaeva &
Associates






1
Paragraph 10 of the founding affidavit in the rescission application
says:


Complainant
was called again to a hearing on the 10th August 2001
(see copy of letter to complainant marked Annexure “RG”). The
Disciplinary hearing was held on the 10th August 2001,
and it recommended that the Public Service Commission be approached
for its recommendation to discharge complainant. (See copies of the
Minutes Marked Annexure “RG”).




2
Rule 7(3) of the Rules of the District Labour Court provides:






(3) Except with leave of the chairperson on good
cause shown, a respondent who has not served a reply in accordance
with this rule shall not be entitled to take any part in the
proceedings of the court.”




3
This is what Mr Britz says in his judgment (at p. 38 of the record):
“It is hardly impossible (sic) [he meant possible] to believe
that Mr Asino was unaware of the date of the hearing in the District
Labour Court because the private secretary of the
Applicant/Respondent has signed for receiving the notice of the date
of the hearing and she said that all documents related to this
matter were furnished to the office of the Attorney-General.”